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City to Urge Attorney General to Investigate Fraud in Housing

Will send a letter asking to halt foreclosures and potentially push ahead with a lawsuit against banks for their role in the mortgage crisis

The city council will send a letter to Attorney General Kamala Harris, asking her office to work with the state legislature and courts to halt foreclosures by suspending California Government Code that requires sheriffs to serve all notices related to evictions.

The move was approved unanimously Monday night by all council members present at the meeting.

The letter argues that because of alleged deceptive trade practices by lenders, foreclosures in Petaluma, and elsewhere in California, should be temporarily stayed. This includes practices such as “robo-signing,” in which banks signed off on modification applications without fully reviewing them and because many banks don’t even hold the actual mortgages to the homes they are now trying to foreclose.

“There are a growing number of allegations of mortgage fraud,” states the letter, signed by Mayor David Glass. “We are concerned more people will lose their homes without having the ability to fight wrongful evictions.”

Currently, more than 400 Petaluma residents are facing foreclosures and homes are sold almost daily at local .

The letter also urges the Attorney General to file a lawsuit against banks on behalf of cities seeking restitution for the impact of the housing crisis on city budgets. According to estimates, Petaluma has lost more than $800,000 in property tax revenues since 2007 and $200,000 in property transfer taxes.

See a draft of the letter in the attachments on the right

The letter was the brain child of Occupy Petaluma, which has made foreclosures one of their focal points. At Monday's meeting, several members read a letter to the council urging it to send the letter to Sacramento.

"The wheels of justice may spin slowly, but the sickness of a system that continues to dispossess families of home and hearth must be stopped now," said Amy Hanks, a member of Occupy Petaluma, in a prepared statement. "The mortgage crisis is no less than a cancer eating away at the heart of the American economy and the American dream. Our local and national economies are bleeding through the gaping wounds of empty, foreclosed homes. We can’t save the patients if we don’t stop the bleed!"

Do you think a lawsuit against banks by the Attorney General would recoop money cities have lost as a result of the housing crisis?

LongTimeLocal December 21, 2011 at 05:56 AM
As to Tim Nonn, the lack of his name above, brilliant, doesn't make it so. It seems you're uninformed too. Just have another toke till you feel better. I might not agree with Nonn, but he was the only one among you to bring the issue out.
Go Occupy! December 21, 2011 at 06:10 AM
"Just have another toke till you feel better." What is your point with the drug use accusations? Again, why are you so snarky to EVERYBODY? If there is anyone here that needs a toke or two it would be you. And how do you know that I had anything to do with the Occupy movement? If someone has the name cow, do you think they are a real cow or do you just assume? I'm just curious as to why you didn't use the other part of the park, you know, the side that the Occupy movement was not set up in?
Concerned Citizen December 21, 2011 at 04:15 PM
Linda, while it's true some people did what you suggest, they were only able to do with the bank's full blessings. Ask yourself why they had Stated Income loans in the first place? Ask yourself why they turned a blind eye to stated incomes that were obviously false? The banks simply wanted to loan money,and they didn't care. Two weeks ago I refinanced my home to simply get a lower interest rate, and had 800+ FICO, excellent job/credit history, yet they pulled multiple years of Tax Records, Income Statements and Credit Reports because, as my loan rep told me, "We've changed back to the old way of doing it". The "old way" should have been the only way.
LongTimeLocal December 22, 2011 at 06:24 AM
Some days I think it's better to just watch someone dig themselves a deeper hole. No need to even comment more. I'll just watch Go Occupy ridicule themselves increasingly - no further help needed from me. I look forward to the next comment adding to the pile of nonsense so far - no help needed from me, so GoOccupy will not get a single further comment from me. No more feeding the fool.
Go Occupy! December 22, 2011 at 02:05 PM
So, in your own special way, you are agreeing with everything I said. But this is somewhat familiar for you, isn't it? When you write "will not get a single further comment from me", is that a promise? I think that is great news, because, in all honesty, it's a bit tedious reading your same snarky remarks over and over, but presented in a different way to every person that doesn't agree with your off the wall POV.

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